Our 1st equity Mil.
- Thread starter agent007
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Great analogy! I love it!
Well, it is not mine. I read here somewhere.
Evolution is the name of the gain. In the near future, after the engine is delivering at the rate we want it to, our plan is to sale 30% of what we buy. Just to keep things interesting
Enjoy,
James.
$1m will probably generate $50k. Even assuming you own your PPOR, you'd still have to pay land tax, rates, etc. That doesn't leave you much for living expenses, even though $1m is far more than most people have.
Guess my goal of sustainable $1m after tax income isn't so far fetched after all.
Alex
I have a mentor, who taught me about LOE and LVR...magic stuff! I too have learned an enormous amount from this forum and devour the posts for breakfast daily.
Congrats on going for the $2M guys and gals..
What 'did' you learn about LOE and LVR sailor, enquiring minds (okay...me) want to know?
A few months ago, my cousin sat me down and gave me a good financial talking to.
I asked him how he could afford to do what he was doing (eg buy, reno, hold or sell). He explained what a trust was...until then the only trust I understood was my SMSF (which is involved with the share market and IPs). He explained what LOE and LVR meant..like how they worked. I was fascinated! I kept asking questions all night. Then we sat down with some scrap paper and he showed me how I could buy another property, using some LVR from my PPOR, and fund both the cost of the IP and the IO loan repayments for the new IP. So in essence the bank was lending me the money to pay their own IO loan.
And it is tax deductable....bonus.Then he explained LOE. For example: buy an IP using the above strategy. Wait (and maybe do some renos) until the property appreciates in value. LVR to the limit. Bank pays the IO loan for me, and I have some spare $$ to live on. Do that multiple times and I can semi-retire. {I have no intention of ever fully retiring...might write a book or something!} I don't have kids or anyone to inherit my $$, so apart from something charitable (I am working on setting up a scholarship fund), I intend to die with a huge amount of debt.
So...changed my accountant...got a hybrid trust...got a really good finance broker...got onto SS and still learning heaps, went shopping for RE and the rest is history.
Redwing, I know this sounds a bit simplistic, and it's quite complicated, as my accountant has explained to me...and I'm asking lots of questions as I go along. This is such a HUGE learning curve for me....and my knowledge increases as I go along...and so do my plans.
What I really learned was that I had to do a mind-shift. I had to change my concept of money, of debt, of finance, of who I thought I was in relationship to money and wealth. All that was a bit of a stretch...and I'm getting there.
Hi all,
This year a milestone in our financial plan has been achieved. We've reached our first $1M in equity!. It happens 2 years before originally planned. When we started this journey, we thought that a million $ was a lot of money and that somehow we’d feel different. But, the reality is that we feel the same. We still feel poor though, with a rich mind set.
According to our calculations, the next equity Mil will come in another 3 or 4 years. This time around we have no expectations and most probably will still feel the same.
Our relation to $ and finance had evolved along these years. The way we structure deals, even simple ones, is different to what most of the people we know do. It is a lot of fun
Thank you all,
James.
GREAT WORK James
Gives us something to aim for; we're only at half that amount and have a LVR around 60% at the moment, I'd be interested if you could give a few more details re your strategy as well.
We've moved into some Managed Funds of late and are looking at another IP soon, we've picked up some great tips that have assisted of late from the forum re LOC's and Structuring our bank accounts as well as the managed funds threads.
We still feel poor though, with a rich mind set.
I can relate to this.
Well done on the equity.
Cheers
quoll
Sounds llike you may have acquired it quickly?
Hi redwing,
My strategy is nothing special or flashy at all. It's rather boring I'd say
Basically it resumes to (no particular order):
1- Live beyond your means
2- Educate yourself all the time (read, go to seminars, talk to like minded people, etc)>>> Change your mind and be open to new ideas.
3- Invest as much as you can as quickly as you can
4- Maximise the use leverage
5- Make sure you have a buffer of $ to keep the dream alive!
. 6- Never be naked
after investing7- Have a plan with a clear target and constantly check it
8- Obey the law and act accordingly
9- Work hard and smart
10- Have fun. You don't know when is your last day
11- Never pay a cent of capital
12- Don't be greedy
13- If you are aggressive, remember that we all are till we start losing money
14- Engage professionals and pay for their advice
15- Don't be arrogant. Be rather humble. That way, people will tend to help you more and volunteer information for free.
16- Help as many people as you can as long as they want. The Universe will retribute you back with more you have gaven.
17- Keep records of transaction. Things could get rather messy and it's difficult to remember all.
18- Don't ever keep lasy $. Put them all to work for as long as possible.
19- Regarding property, try to find ways to add value.
20- When required, team up with other to adquire bigger assets.
21- Don't ever understimate the power of time. Talk to old people and learn from them.
Rgds,
James.
Also there are better things that come out each year that entices your cash holdings. It's not about your life style or the value of your milestone eaten by CPI but the abundance that gets better each year!!1
'Cause, for most, the enjoyment is in the licking, not owning a lot!Why just lick one when you can buy the whole bag?
Regarding ownership of marshmallows:
Licking, like beauty, is in the perception not the reality.
I actually don't consider that I 'own' anything, but I 'hold' or 'control' a tenement or two.
For me, this is 'licking the marshmallow'. I shall have to buy a new car soon, my 13 year old van is guzzling oil and not really a status symbol any more, but there is no thrill in the new car - it is a means of transport, nothing else.
Also, setting up the new franchise could be considered to be 'licking the marshmallow' as it is an indulgence to start a new business (guzzles money for a few years at least), and think of all those new desks and chairs and computers and phone systems and .... all those bright, sparkling new things which are worth diddly squat the minute they are out of the showroom!
Buying another investment property for me, is a treat and a delight. I am in the final throes of completely repainting No: 2 Son's concrete bunker, it has been a joy from start to finish transforming the blue (yes, folks, I do mean 'blue') interior into something smart and modern.
James, a few years ago (maybe five?) we were at the bank (this is before I went into broking) asking for yet more money to buy 'just one more' property, and our then Relationship Manager was filling in our Position Statement. He paused, put his pen down, stood up, lent over and shook Mike's hand, then mine, 'Congratulations' he said 'You've just passed the Magic Million mark!' We were gob smacked (never mind the debt level!!!) - we never bother to add things up, we just keep scraping along.
Another time, the same Manager said to me 'Kristine, you really must think about diversifying, you've got too much tied up in property' 'Oh, OK, Jon' I said 'Next time I'll buy commercial instead of residential!'.
I think we can be too busy doing the work, the investing, the concentration, and these milestones go past in a flash. After we settled on Chelsea I insisted we went out for dinner - a rare treat for us. We must commemorate these important events and celebrate our own achievements.
So, James, I hope you had a festive dinner, raised a toast to yourselves, well done - and this is only the beginning! Enjoy the second million, it happens a lot quicker and quite differently than the first.
Cheers
Kristine
Licking, like beauty, is in the perception not the reality.
I actually don't consider that I 'own' anything, but I 'hold' or 'control' a tenement or two.
For me, this is 'licking the marshmallow'. I shall have to buy a new car soon, my 13 year old van is guzzling oil and not really a status symbol any more, but there is no thrill in the new car - it is a means of transport, nothing else.
Also, setting up the new franchise could be considered to be 'licking the marshmallow' as it is an indulgence to start a new business (guzzles money for a few years at least), and think of all those new desks and chairs and computers and phone systems and .... all those bright, sparkling new things which are worth diddly squat the minute they are out of the showroom!
Buying another investment property for me, is a treat and a delight. I am in the final throes of completely repainting No: 2 Son's concrete bunker, it has been a joy from start to finish transforming the blue (yes, folks, I do mean 'blue') interior into something smart and modern.
James, a few years ago (maybe five?) we were at the bank (this is before I went into broking) asking for yet more money to buy 'just one more' property, and our then Relationship Manager was filling in our Position Statement. He paused, put his pen down, stood up, lent over and shook Mike's hand, then mine, 'Congratulations' he said 'You've just passed the Magic Million mark!' We were gob smacked (never mind the debt level!!!) - we never bother to add things up, we just keep scraping along.
Another time, the same Manager said to me 'Kristine, you really must think about diversifying, you've got too much tied up in property' 'Oh, OK, Jon' I said 'Next time I'll buy commercial instead of residential!'.
I think we can be too busy doing the work, the investing, the concentration, and these milestones go past in a flash. After we settled on Chelsea I insisted we went out for dinner - a rare treat for us. We must commemorate these important events and celebrate our own achievements.
So, James, I hope you had a festive dinner, raised a toast to yourselves, well done - and this is only the beginning! Enjoy the second million, it happens a lot quicker and quite differently than the first.
Cheers
Kristine
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Great thread James and congrats on reaching your milestone...
There are not many people who can stand where you are standing and look objectively at their life goals. I know it sounds cliché but it's true. Perhaps in reaching this quite formidable objective you'll now have the rare ability to stand back and re-judge what you think is important and have the acumen to bring about changes that will make the next milestone, whatever it may be, that much more fulfilling.
Not many in our society can say "Yeah, I made a Million and to tell you the truth...it bored me" There are many who've obviously been in the same boat (Rene Rivkin comes to mind as an extreme example) but we rarely see it publicized or talked about freely.
We all try to fool our egos with "axioms" like "money doesn't buy happiness" but deep down we don't really believe it. How can we when new cars, clothes, products etc are being rammed down our throats at every turn. As far as the media will have us believe, money = happiness plain and simple. It's interesting how much conditioning slips under the radar and I secretly worry for our kids.
Anyway, I thank you for your frankness. It reminds us all to effect a little perspective along the way to what we believe are our life goals and perhaps look inward every once and a while to understand why we're striving for them.
Cheers.
Rory
Perhaps the most valuable commodity in your portfolio is this insight...When we started this journey, we thought that a million $ was a lot of money and that somehow we’d feel different. But, the reality is that we feel the same. We still feel poor though, with a rich mind set.
There are not many people who can stand where you are standing and look objectively at their life goals. I know it sounds cliché but it's true. Perhaps in reaching this quite formidable objective you'll now have the rare ability to stand back and re-judge what you think is important and have the acumen to bring about changes that will make the next milestone, whatever it may be, that much more fulfilling.
Not many in our society can say "Yeah, I made a Million and to tell you the truth...it bored me"
There are many who've obviously been in the same boat (Rene Rivkin comes to mind as an extreme example) but we rarely see it publicized or talked about freely. We all try to fool our egos with "axioms" like "money doesn't buy happiness" but deep down we don't really believe it. How can we when new cars, clothes, products etc are being rammed down our throats at every turn. As far as the media will have us believe, money = happiness plain and simple. It's interesting how much conditioning slips under the radar and I secretly worry for our kids.
Anyway, I thank you for your frankness. It reminds us all to effect a little perspective along the way to what we believe are our life goals and perhaps look inward every once and a while to understand why we're striving for them.
Cheers.
Rory
